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EXHIBIT 10.8
JOINT TECHNOLOGY AGREEMENT
THIS AGREEMENT dated as of June 20, 1996, by and between National
Starch and Chemical Company, with its principal offices at 00 Xxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxx Xxxxxx 00000 ("NSC"), and Donlar Corporation, with its
principal offices at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000
("Donlar").
RECITALS
Donlar holds patents and know-how relating to the composition,
manufacture and use of homopolymers and copolymers of thermal polyaspartate
(TPA). National Starch is experienced in the development and marketing of
polymers for use in certain industries and markets where derivatives of TPA may
offer high-value solutions for end users.
Donlar and National Starch desire to enter into this Agreement for the
purpose of developing and commercializing technology relating to derivatives of
TPA in accordance with the terms of this Agreement.
ARTICLE I
DEFINITIONS. For the purposes of this Agreement, the following terms
have the following definitions:
(i) National Starch Fields. Textile treatment water
treatment/corrosion control, industrial dispersants,
detergents, cleaning products for industry and institutions,
personal care including hair, skin and dental products,
adhesives and paper products, including wet and dry ends,
tissue and towel.
(ii) Donlar Fields. Agriculture, superabsorbents and oilfield
chemicals.
(iii) Shared Fields. Pharmaceuticals.
(iv) TPA. Homopolymers and copolymers of thermal polyaspartates.
(v) PSI. Polysuccinimide intermediate used to produce TPA.
(vi) Products. Derivatives of TPA and derivatives of PSI other than
TPA, which Products are developed by NSC and/or Donlar pursuant
to written protocol established by the Executive Committee and
any modifications of protocol which may be made in writing from
time to time under and during the term of this Agreement by the
Executive Committee and delivered according to Article IX.
(vii) Joint Technology. All inventions, patentable or otherwise,
trade secrets, discoveries, ideas, writings, know-how, and
other advances or findings which are directed to the Products,
processes for manufacturing the Products or end-uses of the
Products in those specific fields of use included within the
respective National Starch and Donlar Fields, and which are
developed by NSC and/or Donlar under and during the term of
this Agreement.
(viii) Purpose. To develop and commercialize Products and Joint
Technology.
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(ix) Party-owned Technology. That technology related to Products
which One Party possesses prior to the effective date of this
Agreement or develops and/or acquires independently of the
Other Party subsequent to the effective date of this Agreement,
and which is disclosed under and during the term of this
Agreement.
(x) Net Sales. Gross revenues from the sale of Products, net of
freight, insurance, transfer taxes and similar expenses, less
any returns and allowances.
(xi) Gross Margin. Sales price less cost of raw material and
manufacturing.
ARTICLE II
POWERS, RIGHTS AND DUTIES OF
THE EXECUTIVE COMMITTEE AND THE PARTIES
Section 2.1. The Parties will form an Executive Committee consisting of
either four or six members, as the Parties may determine from time to time.
Each Party will appoint 50% of the members to the Executive Committee.
Executive Committee decisions require the affirmative concurrence of at least a
majority of the members of the Executive Committee. Decisions of the Executive
Committee will be memorialized in writing.
Section 2.2. The Executive Committee will meet on a schedule it
determines, but at least quarterly. Unless otherwise agreed by a majority of
the Executive Committee, meeting sites will alternate between Donlar's office
in Xxxxxxx Xxxx, Xxxxxxxx and National Starch's office in Bridgewater, New
Jersey.
Section 2.3. The Executive Committee shall endeavor to structure the
research and development activities such that each Party, on the average over
time, makes contributions of resources roughly equal to that contributed by the
other Party. Resources may include cash, the use of personnel, and operating
expenses with respect to research and development activities.
Section 2.4. Should any dispute relating to the Purpose arise between
the Parties, the Parties will direct the Executive Committee to attempt to
resolve the dispute and will give the Executive Committee a reasonable period
of time to attempt to do so. Should the Executive Committee be unable to
resolve the dispute within a reasonable time, either Party may terminate this
Agreement as provided in Article VIII.
Section 2.5. The Parties shall utilize their best efforts to comply
with the decisions of the Executive Committee.
Section 2.6. Among other things, the Executive Committee will be
responsible for the following matters:
(a) Identifying, establishing and approving research and
development activities and evaluating progress and results of
research and development activities.
(b) Establishing what resources may be required in order to conduct
the Purpose efficiently and allocating to each Party their
respective fair contribution of such resources.
(c) Developing and administering a patent strategy regarding Joint
Technology, including without limitation, determinations as to
whether and in which jurisdictions to seek patent protection,
the Party responsible for preparing, filing and prosecuting
patent applications,
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maintenance of patents around the world, enforcement/defense of
patents, and expenses accrued in conducting the patent strategy.
(d) Establishing royalty rates with respect to any rights and
licenses granted to either Party under this Agreement and from
time to time adjusting such royalty rates according to Articles
IX and X.
ARTICLE III
TECHNOLOGY RIGHTS
Section 3.1. The Parties agree that all Joint Technology and the rights
associated therewith will be owned jointly by the Parties, whether or not the
Joint Technology is developed jointly by personnel of both Parties or
independently by personnel of one Party.
Section 3.2. Donlar hereby grants to National the worldwide, exclusive
right and license to use Joint Technology in order to make, have made, sell,
offer to sell and use Products in the National Fields, subject to the
provisions of Article IV; provided that, the rights and licenses granted
hereunder shall become nonexclusive upon the tenth anniversary of the
expiration or termination of this Agreement.
Section 3.3. National hereby grants Donlar the worldwide, exclusive
right and license to use Joint Technology anywhere in the world in order to
make, have made, sell, offer to sell and use Products in the Donlar Fields,
subject to the provisions of Article IV; provided that, the rights and licenses
granted hereunder shall become nonexclusive upon the tenth anniversary of the
expiration or termination of this Agreement.
Section 3.4. Each Party hereby grants to the Other Party the worldwide,
exclusive right and license to use Party-owned Technology in order to make,
have made, sell, offer to sell and use Products in the Party's respective
Fields as defined in Article I, subject to the provisions of Article IV;
provided that, the rights and licenses granted hereunder shall become
nonexclusive upon the tenth anniversary of the expiration or termination of
this Agreement.
Section 3.5. Each Party shall have the nonexclusive right to utilize
Joint Technology in the Shared fields.
Section 3.6. Except as provided in Section 3.6.(b), the rights of the
parties in patents directed to the Joint Technology shall be governed by United
States Code Title 35.
(a) With respect to patent applications and patents directed to
Joint Technology, the Parties shall share equally in expenses
relating thereto and shall jointly own all right, title and
interest in any patent issuing thereon. Such expenses shall
include, without limitation, United States Patent and Trademark
Office fees incurred in the filing, prosecution and granting
thereof, or opposition of any foreign patent application or
patent, including costs and expenses of foreign patent agents
or foreign patent office fees, and any taxes, annuities or
maintenance fees required on any pending U.S. or foreign
applications or on any U.S. or foreign patents issued thereon.
The expenses further shall include any U.S. Patent and
Trademark Office fees incurred in reexamination or reissue of
such patents or in any interference proceeding to which such
patents may be subjected.
(b) In the event that one Party elects not to share equally in the
expenses relating to a particular application or patent
directed to the Joint Technology, or fails at any time to
render payment of such expenses, then all right, title and
interest in any such patent
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application or any patent issuing thereon shall be deemed to be
the exclusive property of the other Party, and the Party
electing not to share equally in the noted expenses shall, at
the expense of the other Party, cooperate with the other Party,
or any person to whom the other Party may have assigned its
rights in any such applications or patents, in securing for the
other party or such assignee any applications or patents which
the other Party may seek anywhere in the world, and the Party
electing not to share equally in the expenses and persons
employed by or otherwise engaged by the Party shall, at the
expense of the other Party, execute, acknowledge and deliver to
the other Party or the other Party's assignee all instruments
which the other Party shall reasonably require, give evidence
and do all things which are necessary or desirable to enable
the other Party or its assignee to file and prosecute
applications for, and to acquire, maintain and enforce in all
countries, all letters patent covering such Joint Technology.
ARTICLE IV
ROYALTY PAYMENTS
Section 4.1. In consideration for the rights and licenses granted under
Article III, One Party shall pay directly to the Other Party a royalty equal to
five (5) percent of the One Party's Net Sales of Products in the One Party's
respective Fields and in the Shared Fields.
Section 4.2. The obligations to pay royalty under Section 4.1. shall
expire ten (10) years after the date of expiration or termination of this
Agreement.
Section 4.3. Royalty payments shall be remitted on a quarterly basis
with a statement setting forth the amount of royalty due. Quarter periods
hereunder shall run in any calendar year as follows: January 1-March 31, April
1-June 30, July 1-September 30 and October 1-December 30. The statement and
accompanying royalty payment shall be remitted not more than thirty (30) days
after the end of the quarter for which the royalty payment is due.
Section 4.4. Each Party will allow reasonable access to its records
during ordinary business hours by a mutually agreed upon auditor/accountant to
review the calculation of the royalty payments. Any such inspection shall be at
expense of the Party requesting the audit and any report prepared by the
auditor/accountant shall be considered as Confidential Information and governed
by Article VI.
ARTICLE V
COOPERATION AND INDEMNIFICATION
Section 5.1. Conduct of Business. Each Party shall participate as is
reasonably necessary and as is requested by the Executive Committee in the
conduct of the Purpose. Nothing in this Agreement shall preclude the employment
of any agent or third party (whether or not such agent or third party is
affiliated with or in any way related to any Party) to manage or provide
services to the Purpose subject to the approval and control of the Executive
Committee.
Section 5.2. Donlar agrees to defend, indemnify and hold harmless
National Starch, its agents or employees from and against all claims, actions,
judgments, losses and expenses, including attorney fees, sustained or incurred
by National Starch, its agents or employees which arises or results from (1)
the performance, failure to perform, or improper performance of work under this
Agreement by Donlar or any other breach by Donlar of the terms and provisions
of this Agreement, (2) Donlar's receipt,
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possession, handling, processing, manufacturing, packaging or shipment of any
raw materials, intermediates and/or Products, (3) any violation or alleged
violation by Donlar of any federal, state or local statutes, ordinances,
orders, rules, regulations or directives applicable to the receipt, possession,
handling, processing, manufacturing, packaging or shipment of the Products or
any raw materials or intermediates used in the manufacture of the Product or
the disposal of any waste or by-product arising or resulting form the
manufacture of the Products, (4) any negligent or willful act or omission of
Donlar, its employees, subcontractors or agents, or (5) the generation,
handling, storage, treatment or disposal of any solid or liquid waste or
by-products arising or resulting from the manufacture of the Products.
Section 5.3. National Starch agrees to defend, indemnify and hold
Donlar, its agents or employees harmless from and against all claims, actions,
judgments, losses and expenses, including attorney fees, sustained or incurred
by Donlar, its agents or employees which arises or results from (1) the
performance, failure to perform, or improper performance of work under this
Agreement by National or any other breach by National of the terms and
provisions of this Agreement, (2) National's receipt, possession, handling,
processing, manufacturing, packaging or shipment of any raw materials,
intermediates and/or Products, (3) any violation or alleged violation by
National of any federal, state or local statutes, ordinances, orders, rules,
regulations or directives applicable to the receipt, possession, handling,
processing, manufacturing, packaging or shipment of the Products or any raw
materials or intermediates used in the manufacture of the Product or the
disposal of any waste or by-product arising or resulting form the manufacture
of the Products, or (4) any negligent or willful act or omission of National,
its employees, subcontractors or agents, or (5) the generation, handling,
storage, treatment or disposal of any solid or liquid waste or by-products
arising or resulting from the manufacture of the Products.
ARTICLE VI
CONFIDENTIALITY
Section 6.1. Confidential information disclosed in tangible form will
be conspicuously marked to identify its ownership, for example by the following
legend:
"CONFIDENTIAL - PROPERTY OF ".
The confidentiality of Confidential Information disclosed in
non-tangible form, such as oral or visual disclosures, must be confirmed in
writing within thirty (30) days of such disclosure.
Section 6.2. Each Party will preserve the other Party's Confidential
Information in strict confidence and safeguard its confidentiality in
accordance with good industrial operating practice and with the same care and
protections that the Party accords to its own confidential proprietary
information.
Section 6.3. Neither Party will use the Confidential Information of the
other Party except for the performance of the Purpose.
Section 6.4. Confidential Information shall include all proprietary and
Confidential Information pursuant to Section 6.1, including but not limited to
all technical information relating to the Products, processes for manufacturing
the Products and end uses of the Products, and customer names or related
business information of either Party.
Section 6.5. The obligations of confidentiality specified in this
Article shall not apply to any Confidential Information which (1) is at the
time of disclosure, or thereafter becomes other than through the fault of the
receiving party, generally available to the public, (2) was known to the
receiving party prior to the disclosure thereof by the other party, (3) is
disclosed to the receiving party by a third party
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who is not thereby in breach of any confidentiality obligation to the other
party with respect thereto, or (4) is independently developed by the receiving
party as evidenced by its records.
Section 6.6. The provisions of this Article shall survive the
termination or expiration of this Agreement.
ARTICLE VII
TERM
The Term of this Agreement commences of the date of execution and
continues for a period of ten (10) years thereafter, unless terminated
previously by either Party according to Article VIII hereof.
ARTICLE VIII
TERMINATION
Section 8.1. This Agreement shall terminate on the first to occur of
the following dates:
(i) The date of expiration of the term of this Agreement pursuant to
Article VII.
(ii) Sixty (60) days after the date of the institution of bankruptcy
proceedings against either Party, provided that the bankruptcy proceeding is
not terminated within the sixty (60) days.
(iii) By express written agreement of both Parties.
(iv) By either Party upon giving the other Party written notice of its
intent to terminate not less than sixty (60) days prior to such termination
date.
(v) One Party breaches any material term or condition of this Agreement
and fails to remedy the breach within sixty (60) days after being given notice
thereof by the other Party.
Section 8.2. For purposes of this Agreement, the "bankruptcy proceeding"
shall be: (a) the filing of an application by such Party for, or a consent to,
the appointment of a trustee of the Party's assets; (b) the filing by such Party
of a voluntary petition in bankruptcy or the filing of a pleading in any court
of record admitting in writing to inability to pay debts as they come due; (c)
the making by such Party of a general assignment for the benefit of creditors;
(d) the filing by such Party of an answer admitting the material allegations of,
or consenting to, or defaulting in answering, a bankruptcy petition filed
against such Party in any bankruptcy proceeding; or (e) the entry of an order,
judgment or decree by any court of competent jurisdiction adjudicating such
Party as bankrupt or appointing a trustee of such Party's assets, which order,
judgment or decree continues unstayed and in effect for any period of sixty
(60) days.
Section 8.3. Termination of this Agreement shall not release either
Party from any liability which at the time of termination has already accrued to
the other Party or which thereafter may accrue in respect of any act or omission
prior to such termination, nor shall any such termination hereof affect in any
way the survival of any right, duty or obligation of the other Party which is
expressly stated elsewhere in this Agreement to survive termination hereof.
Section 8.4. The provisions of Articles III, IV, V and VI shall survive
the termination or expiration of this Agreement.
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Section 8.5. Upon termination or expiration of this agreement, the
parties will have the following rights/obligations.
(a) For a time period of ten (10) years, commencing on the date of
termination or expiration of this Agreement, National agrees to
purchase its entire requirement of TPA and/or PSI from Donlar and
Donlar agrees to supply National with National's entire requirement of
TPA and/or PSI. Should Donlar fail for any reason to supply National
its entire requirement of TPA and PSI, then Donlar grants to National a
royalty-free license under any rights which Donlar may possess and
which may be necessary for National to make or have made those
quantities of TPA and/or PSI which are required to fulfill National's
entire requirement of TPA and PSI.
(b) The price at which Donlar sells and National purchases TPA
and/or PSI pursuant to Section 8.5 (a) is to be negotiated and agreed
upon in good faith by the parties hereto within thirty (30) days of
such termination or expiration and adjusted annually thereafter as set
forth below. Should the parties not agree upon a price within the
thirty (30) days of such termination or expiration, then the price is
to be set at the current or most recent price at which National is or
was purchasing TPA and/or PSI and adjusted annually thereafter as set
forth below.
(i) In the event that National has purchased TPA and/or PSI
over the previous twelve (12) month period, the price will be
calculated to be the current or most recent price at which
National is or was purchasing TPA and/or PSI, adjusted to
reflect the actual cost pass-through of aspartic acid and/or
maleic anhydride used to prepare the TPA and/or PSI.
(ii) In the event that National has purchased TPA but has
not purchased PSI over the previous twelve (12) month period,
the price of PSI will be calculated such that the Percent Gross
Margin for the PSI will be the same as the Percent Gross Margin
for that particular TPA which is produced or would be produced
from the PSI.
(iii) In the event that National has purchased PSI but has
not purchased TPA over the previous twelve (12) month period,
the price of TPA will be calculated such that the Percent Gross
Margin for the TPA will be the same as the Percent Gross Margin
for that particular PSI from which the TPA is produced or would
be produced.
(iv) In the event that National has purchased neither TPA
nor PSI over the previous twelve (12) month period, the price
will be based upon the price of the TPA and/or PSI which Donlar
has sold the largest quantity of over the previous twelve (12)
month period.
(c) Notwithstanding Sections 8.5.(a) and 8.5.(b), at all times, the
price at which Donlar sells and National purchases a particular TPA
and/or PSI pursuant to Section 8.5 shall be no more than the lowest
price at which Donlar sells a TPA and/or PSI having equivalent chemical
and physical properties to any third party; and Donlar hereby agrees to
sell the particular TPA and/or PSI to National at the lowest price at
which Donlar sells a TPA and/or PSI having equivalent chemical and
physical properties to any third party.
Section 8.6. Each Party will allow reasonable access to its records
during ordinary business hours by a mutually agreed upon auditor/accountant to
review and verify the calculation of the prices of TPA and/or PSI. Any such
inspection shall be at expense of the Party requesting the audit and any report
prepared by the auditor/accountant shall be considered as Confidential
Information and governed by Article VI.
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ARTICLE IX
NOTICES
Section 9.1. All notices and demands required or permitted under this
Agreement shall be in writing and may be sent by certified, registered or first
class mail, postage prepaid, or delivered to the Parties personally or by
messenger, courier, overnight express, telecopy, telex or other electronic
means, or other commercially customary means of delivery, at their addresses as
shown beneath their respective signatures to this Agreement. Any Party may
specify a new address for service of notice by notifying the other Party in
writing of such new address, which change shall become effective upon receipt
of such notice by the Party to whom the notice is directed.
Section 9.2. Any notice or other communication required or permitted
under this Agreement shall be deemed to have been duly given (i) on the date of
delivery, if delivered personally (or upon tender of deliver, if deliver of the
notice is refused), (ii) on the business day after dispatch by documented
overnight delivery service such as Federal Express, if sent in such manner, or
(iii) on the date of transmission by telecopy or telex or other means of
electronic transmission, if so transmitted, provided that a confirmation copy
of any such electronic transmission is sent no later than the business day
following the day of electronic transmission by documented overnight delivery
service or first class mail, postage prepaid.
ARTICLE X
AMENDMENT OF THE AGREEMENT
This Agreement may be amended in any respect only upon the joint
written consent of the Parties.
ARTICLE XI
MISCELLANEOUS
Section 11.1. This Agreement constitutes the entire agreement between
the Parties with respect to its subject matter. It supersedes any prior
agreement or understanding between them, and it may not be modified or amended
in any manner other than as set forth in Article X of this Agreement.
Section 11.2. This Agreement and the rights and duties of the Parties
shall be governed by and interpreted in accordance with the laws of the State
of Illinois.
Section 11.3. Except as herein otherwise specifically provided, this
Agreement and all rights, obligations and liabilities arising hereunder shall
be binding upon and inure to the benefit of the Parties and their successors
and assigns.
Section 11.4. Wherever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and
the plural, and pronouns stated in either the masculine, the feminine or the
neuter gender shall include the masculine, the feminine and the neuter.
Section 11.5. Captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provisions hereof.
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Section 11.6. If any provision of this Agreement or the application of
such provision to any person or circumstance shall be held invalid, the
remainder of this Agreement or the application of such provision to persons or
circumstances other than those to which it is held invalid shall not be
affected thereby and shall continue to be binding and in force.
Section 11.7. In the event either of the parties by reason of an Act of
God, including fire, windstorm and flood; by inability to obtain raw materials,
supplies, fuel or power, by work stoppage caused by strike or other labor
dispute; by governmental prohibitions; or by any other cause unrelated to acts
or omissions of the party suffering such disability, suffers the inability to
perform all or any portion of its obligations under this Agreement, except for
payment of invoices, then the party suffering such disability shall be excused
from such performance for so long as such event causes such inability to
perform. Such party affected by any such event shall immediately notify the
other party and indicate the expected duration of such interruption.
Section 11.8. This Agreement shall not be assigned or transferred by
Donlar or NSC by operation of law or otherwise, whether in whole or in part,
without the prior written consent of NSC or Donlar, respectively, which consent
will not be unreasonably withheld.
Section 11.9. At any time or from time to time on and after the date of
this Agreement, each party shall, at the request of the other party (i) deliver
to the requesting party such records, data or other documents consistent with
the provisions of this Agreement, (ii) execute, and deliver or cause to be
delivered, all such assignments, consents, documents or further instruments of
transfer or license, and (iii) take or cause to be taken all such other
actions, as the requesting party may reasonably deem necessary or desirable in
order for the requesting party to obtain the full benefits of this Agreement
and the transactions contemplated hereby.
Section 11.10. Donlar and National Starch shall at all times and for
all purposes under this Agreement be considered independent contractors.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective noted dates.
DONLAR CORPORATION NATIONAL STARCH AND CHEMICAL
COMPANY
By: Xxxxx X. Xxxxxx By: Xxxxxx Xxxx
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XXXXXX IZY
VICE PRESIDENT
GENERAL MANAGER,
TITLE: President TITLE:RESINS AND SPECIALTY CHEMICALS
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DATE: June 20, 1996 DATE: June 21, 1996
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ADDRESS FOR NOTICE: ADDRESS FOR NOTICE:
0000 XXXXX XXXXXX XXXXXX 10 FINDERNE AVENUE
BEDFORD PARK, IL 60501 XXXXXXXXXXX, XX 00000
Attn: Xx. Xxxxx Xxxxxx Attn: Xx. Xxxxxx Xxxx
Xx. Xxxxxxxx Xxxx Xx. Xxxxxxx X. Xxxxxx
Mr. Win X. Xxxxx
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